EU Justice Commissioner Viviane Reding proposes a mandatory quota system in a bid to increase the number of women on boards, reveals corporate support and company secretary services firm London Registrars (http://www.london-registrars.co.uk/).
In March of this year, the EU announced the launch of a three month consultation which will analyse views on proposed levels for the board gender quotas, which agency should be in charge of monitoring quotas and enforcing the new limits, as well as which punishments should be in place for non-compliant companies. According to the EU Commissioner, the quotas are being considered as a response to the failure of many EU countries to make real progress towards the target of a 40% minimum proportion of women on boards. Recent figures reveal just 13.7% of the board members of listed companies within the EU are currently women. Speaking in a recent interview, the Commissioner explained, “I am not a fanatic about quotas, but I like the results quotas bring about”.
Lord Davies, who was behind the report into women on the boards of UK listed companies, is hoping the quota proposals will be rejected:”I do not believe quotas are the answer. I do believe self-regulation is the right way. I think clearly we would be disappointed if quotas were imposed across Europe; that would be a mistake. The reality is, other countries are not in great shape. This raises the temperature and raises the focus on companies that are not really getting”.
Home Secretary Theresa May is also not a fan of the quota system. When asked recently about how the Government would be tackling the issue of women on boards, she said, “The best way to get change is to do it in a way which isn’t imposing a quota on a company, but is encouraging people to recognise the talents within those companies. Progress is being made as a result of Lord Davies’s report. We continue to monitor this and will continue to work with companies to encourage them to use the talent within them.”
It does seem that even without board gender quotas, the UK is starting to make progress in this area. According to recent research, only ten all-male boards remained in the FTSE 100 and the proportion of women on boards had increased from 12.5% to 14.9% over the last year.